SocGen books $731 million writedown on Russia unit

PARIS (Reuters) - Societe Generale , France's second largest listed bank, said it had booked a 525 million euro ($731 million) writedown on the value of its Russian unit Rosbank after months of political crisis in Ukraine.

The goodwill charge marks yet another blow to SocGen's ambitions in Russia, where it has poured billions into restructuring Rosbank in the face of tough competition from local state-owned players and the arrest last year of its top Russian executive on bribery charges.

SocGen blamed heightened uncertainty as well as the decline in the Russian rouble for the writedown but said it expected to achieve "satisfactory" returns in Russia in 2016, adding it would give an update on its three-year outlook for Russia on May 13.

The geopolitical crisis in neighboring Ukraine has seen Western sanctions imposed on Russia and scared off investors. The International Monetary Fund has said Russia is already "experiencing recession" while the Organisation for Economic Co-operation and Development cut its economic growth forecasts.

SocGen on Wednesday reported a 13.3 percent drop in first-quarter net income to 315 million euros ($439 million), despite a 14 percent increase in revenue.

Stripping out the writedown, SocGen's net income would have been 941 million euros, or higher than the 911 million average analyst forecast as compiled by Thomson Reuters I/B/E/S.

The bank said its closely watched core Tier 1 capital ratio under Basel III rules had risen to 10.1 percent at end-March from 10 percent at end-December.

SocGen, like rivals across the European banking industry, has been selling assets to bolster its balance sheet and improve profitability in an environment of slow growth in Western Europe. It is targeting a return-on-equity of 10 percent by end-2015 versus an underlying ROE of 8.4 percent in 2013.

($1 = 0.7177 Euros)

(Reporting by Lionel Laurent and Matthias Blamont; Editing by James Regan and Miral Fahmy)